Bond traders brace for turbulence as former Fed chair Jerome Powell retains a voting seat on the board while Kevin Warsh takes the helm. Powell’s decision breaks 80‑year precedent, raising questions about clarity in policy signals.

The $30 trillion U.S. Treasury market, the benchmark for global rates, may feel the strain. Investors fear Powell’s presence could blur the Fed’s messaging during a period of split committee views and rising oil prices.

RBC BlueBay’s Mark Dowding warns that the “shadow of Powell” could add volatility when Warsh pursues a new inflation framework yet remains dovish on rates. Treasury Secretary Scott Bessent and President Donald Trump have already criticized the central bank, intensifying political pressure.

Ultimately, Powell’s low‑profile pledge may slow Warsh’s reform agenda, but the mixed signals could keep bond yields unsettled for months.